ANOTHER week of volatility in the wool market, but hardly surprising given the economic, political and even sporting backdrop punters have had to contend with this week.
Pre-sale betting was firmly backing an increase in price for wool this week after a 'down' week previously, which had obviously overshot the mark.
So, when the starter's gun sounded, well after the crowd at Flemington had dispersed, the market shot up by a dollar.
Prices continued to climb as the US election trend confounded pollsters yet again, and people in Australia wondered what near zero interest rates would mean for them following the RBA decision, while the Maroons beat the Blues in Adelaide.
Yet again, the relatively small market size made for exaggerated price movements and the increases of up to $1.30 on Merino fleece was again shown to be too much.
A change of sentiment occurred overnight and the Thursday market was a much more subdued affair.
The market dropped considerably on the second day of selling, but at least in some areas found a level, later in the day to suggest the turning point was not too far away.
Over the week, AWEX's Northern Market Indicator closed up 55c on 1245c. The 17 micron indicator closed on 1808c, 18 micron 1578c, 19 micron 1393c, 20 micron 1259c, 21 micron 1208c, 28 micron 615c, and 30 micron 473c.
For customers overseas, after an erratic performance the Australian market closed US40c dearer, Euro35c and in local currency terms the total week's movement was 50c.
The up-trend is still intact overall with the highs getting higher, and the market is now at an interesting juncture.
The current level for Merino fleece has been a bit of a ceiling in recent weeks, but has also been a solid support level in the past from where the market launched its four year bull run from 2015.
Most other apparel fibre and commodities now seem to have worked their way through the major cyclical downturn, precipitated by the emergence of COVID-19.
When a sustained cyclical uptrend can be established is the big question.
Thus far we have been able to shrug off the effects of the downturn, but like a recovering patient, the market needs to gather the necessary strength to climb back up the mountain.
It will happen, as it always does with the wool market, but given the current COVID situation around the globe expecting a big surge immediately from here is a big ask.
The South African market did see a large surge this week, which had some pundits a little perplexed.
Selling on Wednesday after the big jump in Australia their market followed suit, but the telex machines would have been working overtime saying that the Aussie market had topped out, and nobody was prepared to follow these new prices yet.
All the Merino indicators finer than 22 micron finished higher than Australia in the Cape market reports, but they did have an added impetus.
The official Chinese government rebate for South African wools for 2020 was clarified, and any wools needed to be in China before December 31 this year.
So, to ensure enough time for shipment, and the inevitable delays that seem to happen these days, last week was thought by most to be the cut-off.
This created a flurry of buying orders over there by Chinese importers keen to capture a few more bales into this rebate scheme.
Rebates and tariffs seem to be the hot topic of conversation at present, but with Australia being the major source of apparel wool for China it is simply not logical for merino to be caught up in the current political bunfight.
The wool industry has far more challenging problems to solve with the perennial problem of discretionary purchases and how to get people, particularly in Europe, out of their homes, or at least onto their keyboards, and buying more woollen garments.
Everybody needs them, it helps the environment as well as being so much better for their own health and well-being, they just need to be told or shown what to do.
Woollen garments should be the only Christmas presents under a farmer's tree this year.
- Bruce McLeish, Elders
Like every grower in Australia enjoys sitting down to a lamb roast, or a loin chop a few times a week, even though that product is getting up there in price towards the special meal status, woollen garments should be the only Christmas presents under a farmer's tree this year.
Understanding what people make from the product one grows is an integral part of any business, and it is generally alarming to see a plethora of other fibres being worn by the world's growers.
The female of the species is not the problem, as showcased at the recent Anlaby Station event celebrating Women in Wool, and many retailers are seeing an uptick of women's wear sales despite the pandemic.
Getting blokes into wool, outside of workwear, for although wool is great at absorbing moisture and providing comfort, it does not generally hold up to rigours of farm work and grease stains. But as an after-hours get-up, there should be no alternative for any wool grower anywhere.
Creating the next facet of demand for wool is becoming rather urgent as time marches on and the Chinese domestic season has one or two large spurts left in it.
November the 11th is known in China as 'Singles Day' and has become a significant retail event thanks to the commercial acumen of people like Alibaba's co-founder Jack Ma.
China's netizens are implored to buy something for themselves to make themselves feel better, and what could make one feel better than a nice soft, environmentally sound merino sweater.
Not to be left out of any retail opportunity the shopkeepers across the globe have all jumped aboard the Singles Day bandwagon and hopefully it will be enough to kick-start a bit of retail activity across the northern hemisphere.
Now that Team USA has a new coach perhaps the world can get back onto a more stable footing, conquer the bug that has been causing all the grief and wind up 2020 in a positive fashion.
The Merino industry has a few unanswered questions around when to sell off the grower held stocks, and how much volume the market can absorb, but the futures market is telling us that this price plus or minus 20c is sustainable for the long term.
Hopefully the pendulum has nearly finished its downswing after last week's radical movement and a relatively benign calm can be restored for a while.
